Downtown study finds retail on the ropes

Business is great for restaurants and offices, but shops aren't keeping up

There's money to be made in downtown Mountain View these days -- that is, if you're in the right line of business.

A new city economic report on the Castro Street area found that restaurants and the demand for tech office space are lifting Mountain View's downtown to unprecedented growth and sales. But that prosperity isn't being shared among all businesses. Brick-and-mortar retail shops like bookstores, art galleries and knick-knack sellers are lagging behind, showing modest sales while facing the rising costs that come with a booming market.

It was a mixed-bag of a report reviewed on Tuesday morning by the city's Downtown Committee. The report, conducted by the firm Economic & Planning Systems (EPS) of Oakland, found that downtown sales receipts had nearly doubled since it last looked at the numbers in 2011. That growth was fueled largely by the dining and drinking establishments, which grew in sales by 83 percent over roughly the same period. Meanwhile, sales for all other retail categories increased on average by only 12 percent.

The challenges facing downtown shops in recent years have been readily apparent. Plenty of unique stores have closed their doors for good, including second-hand bookseller BookBuyers, the Mountain View General Store and Seascape pet shop.

Nooshin Zarkabir, co-manager of East West Bookstore on Castro Street, hypothesized that rising housing costs were having a ripple effect on Mountain View's merchants. For years, loyal customers and service workers have been displaced and moved to other areas. The younger tech workers who have replaced those residents haven't shown the same buying habits, she said.

"It's always been like a roller coaster, but we're having a worse time now than after the recession," Zarkabir said. "Luckily we have a very good landlord who loves us and wants us to stay."

In many ways, downtown Mountain View was "a victim of its own success," according to representatives from the EPS consulting firm. Commercial landlords enjoyed an easy return on investment as downtown property values increased by nearly 60 percent over that period. Those property values are being propped up by a tech sector that's willing to pay top-dollar for downtown office space.

Retail space, which depends heavily on location, is typically the highest-cost commercial space in cities, they said. But not in Mountain View, where downtown leases for offices can fetch prices about 80 percent higher, they reported. They suggested that landlords have an incentive to lease to restaurants and other businesses that serve the office crowd.

The tech industry's downtown office growth has brought thousands of highly specialized jobs to the downtown neighborhood, and it has also nurtured a wave of new restaurants in the area. There are only 37 non-food retail businesses in the Castro Street area, according to a 2016 Downtown Business Improvement Area report. Meanwhile, there are 86 establishments for food and drink in the vicinity.

But that's not to say that all cafes and eateries are raking in cash. Ron Manabe, co-owner of the Tied House, said the downtown restaurant game is becoming much more competitive, with many more high-end bistros "bringing their A-game." That didn't necessarily translate to higher profits, he said.

"The consumers in Mountain View have really benefited since Mountain View has become sort of a culinary mecca," he said. "We're doing OK as far as business, but it's not nearly like it was during the dot-com years."

Market forces had clearly demonstrated that bars and restaurants are in demand, said Jason Moody, a principal with EPS. But he suggested city officials should discuss whether having a downtown dominated by restaurants was necessarily a good thing.

"(Business) is doing well but it's focused on restaurants; it's not focused on a diverse set of options," he said. "The question we'd like to pose is whether there's a desire to diversify and create more of a destination than just for the lunchtime crowd."

That question was pretty much left hanging in the air at the Downtown Committee. Alex Andrade, Mountain View's economic development manager, said his team is currently working on a comprehensive report with policy proposals for downtown business that is expected to go before the City Council in May.

"The market is certainly calling for restaurants here, but we want to have a good balance between the uses," he said. "We want to provide a great overall experience when people come to our downtown."

The downtown business report is still in draft form, and city staff say it isn't ready for public release. However, they did share a copy of the presentation that was presented to the city's Downtown Committee.


21 people like this
Posted by PeaceLove
a resident of Shoreline West
on Mar 17, 2017 at 2:41 pm

Capitalism contains perverse incentives that ultimately can lead to the destruction of all that we value in our area. If you polled the residents of Mountain View, I bet most of them would have opted to keep Seascape and Book Buyers in the downtown because they added value and charm to the city. Because we have accepted a system in which commodification is the norm and maximum extraction is the only value, and in which all our public spaces are privately owned, the inevitable result is that only businesses that make alot of money per square foot can survive. Not necessarily businesses the majority of residents want, but one those that can attract the most dollars.

7 people like this
Posted by Darin
a resident of Another Mountain View Neighborhood
on Mar 17, 2017 at 3:05 pm

Darin is a registered user.

This isn't terribly surprising. Other than the post office, the library, and the Caltrain station, I can't think of anywhere I've gone recently near Castro Street that isn't a restaurant of some sort. Maybe Books Inc, but even then we're usually just passing through on our way upstairs to Caffe Romanza.

11 people like this
Posted by MyOpinion
a resident of Another Mountain View Neighborhood
on Mar 17, 2017 at 3:30 pm

Everyone was making a big fuss about not having a grocery store downtown, now we have Ava's, more people should be shopping there even if for only a portion of their weekly groceries. It's a great store.

No mention of Therapy in this piece, they always seem busy. Overall the retail we have is not the same quality as what you might see in Palo Alto, Los Altos, Books Inc always seems busy, but maybe the lookiloos go home and buy online. I love buying gifts at Books Inc, free gift wrap, great service.

12 people like this
Posted by USA
a resident of Old Mountain View
on Mar 17, 2017 at 3:55 pm

USA is a registered user.

@PeaceLove -- People vote with their feet and their wallets. Whether you like it or not, the people of Mountain View are walking into restaurants and bars and laying down their cash there.

5 people like this
Posted by Bruce Karney
a resident of Old Mountain View
on Mar 17, 2017 at 5:03 pm

I've lived downtown for 30 years, and in the past year I think I've patronized only 4 non-restaurants. I spend somewhere around $1000/year at CVS and slightly less at Ava's. I spend perhaps $200/year at East West and Books, Inc. It always surprises me that Tap Plastics is still open. I assume they must own their building or be at the tail end of a long term low-cost lease. I think an Apple store or maybe a Central Computers store would be viable additions to Castro. Shopping online is just so much more convenient for many product categories that it's hard for me to imagine retail ever making a really big comeback on Castro.

3 people like this
Posted by Amelia
a resident of Old Mountain View
on Mar 17, 2017 at 10:48 pm

I'm not surprised. Most of the retail shops on Castro are poor quality. Therapy, East West Books, Books Inc, and CVS are the only stores I enjoy. Bring more retail like these please!

2 people like this
Posted by Spot-On-USA!
a resident of Rex Manor
on Mar 18, 2017 at 8:29 am

People vote with their purses!

This is a retread of the same issues from 20 years ago.

Downtown Curmudgeons cried for years for a grocery store; they get one; but then continue to buy at Costco.


Like this comment
Posted by AhhPoliticsTooFunny
a resident of Old Mountain View
on Mar 18, 2017 at 11:41 am

Meanwhile...while council laments the loss of retail and available parking, they have quietly granted cheap street parking permits to their friends in Old Mountain View who don't want to park in their own driveway and are tired of competing for parking in front of their homes.

Obviously, parking within your footprint and posting 2hr parking restrictions was the best solution, which would still dissuade commuters and downtown workers but would still invite folks to shop or eat for free in 2hr chunks until councils dream of a car free vision comes to fruition. The 72 time restrictions for friends of council is unenforceable with apiece of chalk. Shuttle blockades and now unfettered city street parking is favoritism plain and simple. Downtown merchants will clearly suffer as will any visitor to downtown.

Now council is spending $100,000.00 to hire a couple parking attendants.

Genius! That should work!

Still trying to reconcile council giving away 3-4 car permits per household in OMV while pushing a bicycle or Uber on everyone else.

2 people like this
Posted by MV Eater
a resident of another community
on Mar 18, 2017 at 11:45 am

I LOVE going to Mountain View for the food. So many great options! It's always such a great vibrant place to go to. But, shopping? I go to Stanford Mall. Other than Books Inc, CVS, and Therapy- where else is there to go? Bring in Sephora, a Williams Sonoma, things people actually want to buy!

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Posted by PA Resident
a resident of another community
on Mar 18, 2017 at 2:03 pm

We frequently come into Castro Street to eat (when we can park) and often wander around some of the shops and occasionally do buy things. There is a shoe shop and a clothes shop, can't remember the names, which are nice so I'm told.

Castro Street is a destination for eating, but it is also worth walking the street if we are not in a hurry like we would be at lunch time. The arts and wine festival is also on our to do list and once again we generally frequent a restaurant and some of the shops.

If there was no interesting retail it would be a detraction from walking further than just going there to eat. But it is impulse buys rather than a shopping destination.

2 people like this
Posted by Truth
a resident of Another Mountain View Neighborhood
on Mar 18, 2017 at 2:08 pm

If the restaurants are doing so well, why do you see so much turnover of them?

4 people like this
Posted by timetrip
a resident of Old Mountain View
on Mar 18, 2017 at 2:59 pm

A few thoughts:

Sometimes when I am not in a good mood I walk down Castro Street to the library. I am always happy by the time I get there. Castro St seems so exciting and so beautiful - everyone seems to be having a good time, both night and day.

I have shopped at many of the retail stores, although I never spend a lot of money at any one of them, but love them all dearly. I am always sorry when one closes.

Half the fun for me is being able to walk there! I hate the thought of parking attendants that take your car keys. If I cannot walk, I will just not go.

I do not eat out a lot, but love it when I do - have visited most of the restaurants at least once. I notice a big turnover in restaurants. Sometimes the closings surprise me; suppose one never really knows who is doing well and who is not.

A few years ago, there was another grocery in the space of Ava's Market. It was a bit different, but very nice. Some of the same staff is still there (maybe they are owners?). It is worth a visit (I often walk through on my way back from CVS and usually find something to buy, but it is more expensive now).

They have a larger variety of groceries than the previous store, plus a nice deli and ready-to-eat foods, and I believe more wine selections. Sometimes a nice guy from San Jose who owns an ale distributorship is there with great samples and also has neat drinking glasses for sale. Ava's Market is a great store and I really like it.

It seems that water will find its own level - as well as the balance of restaurants, retail stores, and groceries in downtown Mountain View. I will always cherish the time I have spent here.

2 people like this
Posted by Sukwinder Dixit
a resident of Old Mountain View
on Mar 18, 2017 at 4:10 pm

We are needing a Philz only!!

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Posted by Tina
a resident of Old Mountain View
on Mar 18, 2017 at 11:58 pm

Do you think there would be interest in handmade souvenir dolls (for both interior decor and play)?
I've been told many times I should open a store and I was thinking about handmade shop in Downtiwn MV

Like this comment
Posted by FluteGuitarDad
a resident of The Crossings
on Mar 19, 2017 at 10:03 am

West Valley Music is a gem. I'd hate to see that disappear. With a budding flautist and guitarist in the house, having a place you can run to for a piece of music or a repair is fantastic. As far as restaurants go, I counted something like 6 bubble tea places downtown these days, do we really need more?

Like this comment
Posted by Numbers
a resident of another community
on Mar 19, 2017 at 1:15 pm

If retail sales are up at all, that's impressive. There are 50% fewer square feet
dedicated to retail, for sure. So that's a doubling of the retail revenue for the
space devoted. You can't switch it all to restaurants and still expect to see anything
else sold. It's all relative.

It would be interesting to know if this is up 200% on a per square foot basis, or what.
Perhaps it's 350% increased when adjusted to space devoted to retail.

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Posted by Mt. View Neifhbor
a resident of North Whisman
on Mar 21, 2017 at 6:55 am

Downtown is so crowded, it isn't worth the time it takes to park unless you're meeting with friends for a convenient dining location. By the time it takes to park, I may as well drive across town for a bookstore or pretty much anything else. Or heck, order online and save the time and gas. It's a hellacious nightmare to park downtown anymore. I have to pick up my mail from the downtown post office at midnight or early in the morning. If I could pick up my mail during business hours, I'd stop and browse the bookstores or have a cup of coffee.

And yes, I agree, I think most MV residents to prefer and appreciate a colorful downtown with a variety of stores, including bookstores. There was a time, when you could go to DTMV just for the bookstores and they were packed.

Like this comment
Posted by PeaceLove
a resident of Shoreline West
on Mar 23, 2017 at 8:59 pm

-- People vote with their feet and their wallets.
-- People vote with their purses!

These comments above prove my point. Many folks have internalized the notion that commodification (putting a dollar value on things) is the best and most logical way to design a downtown. Under this construct field, businesses that can generate the most $/Sq Ft of space deserve to survive over those that can't generate as much, either because they don't have the huge traffic of they just don't have a business model that favors high profits.

My point above it that We the People can decide against having commodification as the #1 design principle for our own cities. But first we need to decide that we actually control our own cities. Not businesses. Not real estate developers. Citizens.

Posted by Name hidden
a resident of Monta Loma

on Aug 17, 2017 at 9:57 am

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?

Sorry, but further commenting on this topic has been closed.

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